If you’re interested in building a source of passive income, it’s imperative that you start investing in dividend stocks. Great dividend stocks pay shareholders on a regular basis. However, if you want to invest in the best, then there are two characteristics that you should be looking for. First, invest in dividend stocks that increase their distribution on a yearly basis. Second, investors should look for stocks that offer dividend yields of at least 3%.
In this article, I’ll discuss two Canadian stocks that satisfy both criteria.
Start with this massive company
Telus (TSX: T)(NYSE: TU) is the first Canadian dividend stock that investors should consider buying today. As you may know, Telus is one of the Big Three Canadian telecom companies. In fact, alongside BCE, Telus operates the largest telecom network in the country. Its coverage area accounts for 99% of the Canadian population. At the end of 2021, Telus reported that it was supporting 9.29 million mobile phone subscriptions, 2.13 connected devices, 2.27 internet customers, and 1.27 million television subscribers.
While all of those numbers may be impressive, Telus’s business is so much more than what it does within the telecom industry. Over the years, Telus has established itself as a true competitor within the healthcare space. Today, it offers a suite of professional and personal healthcare solutions. This includes its line of electronic medical record solutions and MyCare, which is its app that allows users to connect to healthcare professionals from the comfort of their own homes. Entering this year, Telus’s healthcare business covered 20.6 million patients.
With respect to its dividend, Telus is an outstanding stock. The company has managed to increase its distribution in each of the past 17 years. Today, Telus stock offers investors a forward dividend yield of 4.50%. With its strong business supporting a healthy dividend, investors should really consider buying this stock today.
Invest in one of the Canadian banks
Investors should also consider buying shares in the Canadian banks. These companies have always been attractive to Canadians because of their massive presence within the country’s economy. For example, four of the eight largest companies in Canada (by market cap) are banks. If I could only invest in one Canadian bank, it would be Bank of Nova Scotia (TSX: BNS)(NYSE: BNS).
What interests me about Bank of Nova Scotia is its dedication to growing its international presence. In 2021, nearly a third of its earnings came from sources outside of Canada. In addition, in the second quarter of 2022, it appears that Bank of Nova Scotia’s international banking segment drove the company’s growth. Over that period, its international banking segment saw a 50% year-over-year increase in net income.
Bank of Nova Scotia is known for its long history of paying shareholders. It has been distributing a dividend in each of the past 189 years. Further, Bank of Nova Scotia has managed to increase its distribution over the past 11 years. The cherry on top of a great dividend may be the company’s forward dividend yield. Today, Bank of Nova Scotia stock offers investors a yield of 5.38%. This stock is a must-have in your dividend portfolio.
